This is a dollar amount paid per hour of service to the employee, more commonly used to compensate unskilled and semi-skilled laborers in the workforce. This form of compensation comes with an implied understanding that during times of slow or minimal workloads, the employee may not be used to provide services. In effect, there is no guarantee of a regular cycle of pay.

The Different Forms of Compensation

The Different Forms of Compensation

There are two different forms of compensation provided to employees; direct and indirect. Direct forms of compensation have a multitude of types or methods, from salaries to bonuses. Indirect compensation is primarily the various types of benefits and long term incentives. This article is an introduction to the terminology of compensation.

One of the forms of compensation is direct remuneration for services rendered by the employee.  The term used for this is wages.  It consists of four different groups of payment from the employer to the employee.  They are salary, hourly, commission and bonus types of wages.

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